EPS Pension Calculation: Current age 30, current basic salary Rs 25,000; know how much will be EPS pension at retirement
EPS Pension Calculator: Employees' Pension Scheme (EPS) is a monthly pension scheme for Employees' Provident Fund (EPF) account holders. The employee becomes eligible for the pension after at least 10 years of service. The maximum pensionable service is 35 years.
EPS Pension Calculator, EPFO: Employees' Provident Fund (EPF) is a retirement scheme for private sector employees, where not only them but also their employers contribute to their EPF account. But not all of the employer's contribution goes to the employee's EPF account. Of the maximum 12 per cent an employer's contribution, 3.67 per cent goes to the employee's EPF account, and the rest 8.33 per cent goes to the Employees' Pension Scheme (EPS). The employee gets the monthly pension post retirement from the employer's contribution to EPS. Know more about EPS and what will be the monthly pension for a 30-year-old person with Rs 25,000 as the basic salary.
Photos: Unsplash/Pixabay
What is EPS?
The current EPS scheme was started in November 1995 to provide monthly support to EPF members events of superannuation, retirement, or disability, or to their widow/children/survivor in case of the account holder's death. The benefits are also extended to the beneficiaries of the erstwhile Family Pension Scheme, 1971.
EPS nomination
The account holder has the facility of nomination, where they can nominate their wife and family members.
If a person doesn't have a family, they can nominate any person, but if they acquire a family later on, the nomination will be invalid, and a fresh nomination will be done.
Who gets EPS pension?
A person who has completed 10 years of service gets it at the age of 58, which is considered the retirement age by EPFO.
Can one get EPS pension before 58?
EPF account holders can withdraw the pension from the age of 50 at a reduced rate.
Can one get increased pension?
As per EPFO rules, if one defers their pension for two years (up to 60 years of age), they can get a pension at an additional rate of 4 per cent for each year.
How is EPS pension calculated?
In the EPS pension, the basic salary and dearness allowance of a person and pensionable service are considered.
EPS pension formula
EPS Pension = (Average Salary x Pensionable Service) / 70
Here, the average salary is the basic salary and dearness allowance of an employee, and the pensionable service is the time they are employed.
Important factors to know
There is a ceiling of Rs 15,000 for pensionable salary. Even if someone's basic salary and dearness allowance is Rs 30,000, their EPS pension will be calculated at Rs 15,000 salary.
Similarly, the maximum pensionable service is counted as 35 years.
Minimum and maximum EPS pension
The minimum pension one is allowed to get is Rs 1,000, and the maximum is Rs 7,500.
Pension for 30-year-old with Rs 25,000 as basic salary
15,000X28/70= Rs 6,000
They will get a maximum monthly pension of Rs 6,000.
Note
The calculation is based on the current basic pay ceiling of Rs 15,000. The central government is contemplating increasing it to Rs 21,000, which can change the calculation completely.